New Prime Minister Julia Gillard seeks a quick agreement with miners over RSPT in order to counterbalance the issue at this year's general election, according to newspapers.

A report in today's Sydney Morning Herald said Gillard could unveil huge modifications to the profits-based levy as early as this week, including a much higher tax-free threshold. The return on assets that can be merited without paying the new tax, would be doubled to 11 percent from the near 6 percent currently proposed, it said.

A sister paper, The Australian Financial Review, however, published that any agreement with the mining sector ahead of the election was likely to be a preliminary deal only. A negotiation on the final shape of the tax will be done afterwards.

In the final agreement, underlying principles such as the 40 percent headline tax rate could also be altered, the Business Daily said.

Without giving a more specific time-frame, Gillard has announced she will call an election before the year ends. Political experts predict this will occur in August to November.

"In a bid to neutralise the mining tax issue during an election campaign, The Australian Financial Review understands the government will offer to meet mining industry concerns about both the retrospectivity and the headline rate of the tax in return for agreeing to Labor's timetable," the paper said.

The mining sector wants the RSPT to take effect in mid-2012, applying only to new projects, not existing ones. They have warned to cancel more than $20 billion in new investment if the tax pushes through in its current form.
The Australian Financial Review said the resources industry is likely to work closely with Gillard, Australia's first female leader, because she has a greater potential of leading the Labor party back to power at the next election than Rudd.